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English Hindi

Question-2:  ‘The focus in an economy should not just be solely on the economic growth but also on growth of happiness of its citizens’. Discuss.

 

Answer:  Raising living standards of people is known as economic growth. However, modern economies have lost sight of the fact that the standard metric of economic growth, gross domestic product (GDP), merely measures the size of a nation’s economy and doesn’t reflect a nation’s welfare.

Issues with GDP growth

  • GDP by definition is an aggregate measure that includes the value of goods and services produced in an economy over a certain period of time.
  • There is no scope for the positive or negative effects created in the process of production and development.

Need for alternative growth model

  • Modern economies need a better measure of welfare that takes externalities into account to obtain a truer reflection of development.
  • Broadening the scope of assessment to include externalities would help in creating a policy focus on addressing them.
  • Finland, despite not having the highest GDP, tops the list of happiness due to its social safety, personal freedom and a work-life balance while materially superior countries are ranked lower.

Gross National Happiness

  • The term Gross National Happiness was coined in 1979 by Bhutan and was determined by nine domains and four pillars.
  • In 2011, the United Nations recognised the achievement of happiness as a fundamental human goal.

Thus, the quest of humanity for another habitable planet must begin with making our own planet happy and liveable.

In an economy with well-being at its heart, economic growth will simply be another tool to guide it in the direction that the society chooses.

Tags: GS 3 (Economic development)

By – Prashant Tiwari

Updated on 23 May 2022 |   Added on .23 May 2022  |  by admin